Letter of Transmittal
To Tender Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
Borden, Inc.
Pursuant to the Exchange Offer
by
Borden Acquisition Corp.
a corporation formed at the direction of
Kohlberg Kravis Roberts & Co.
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THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , 1994,
UNLESS THE EXCHANGE OFFER IS EXTENDED.
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To Our Clients:
Enclosed for your consideration is an Offering Circular/Prospectus dated
November , 1994 (the "Offering Circular/Prospectus"), and the related Letter
of Transmittal relating to an offer by Borden Acquisition Corp., a New Jersey
corporation (the "Purchaser"), to exchange for shares of Common Stock, par value
$.01 per share ("Holdings Common Stock"), of RJR Nabisco Holdings Corp., a
Delaware corporation, equal to the Exchange Ratio (as defined below) all of the
outstanding shares of Common Stock, par value $.625 per share (the "Borden
Shares"), of Borden, Inc., a New Jersey corporation ("Borden"), and (unless and
until the outstanding Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of January 28, 1986, as amended,
between Borden and The Bank of New York, as Rights Agent, are redeemed by
Borden) the associated Rights, upon the terms and subject to the conditions set
forth in the Offering Circular/Prospectus and the related Letter of Transmittal
(which together constitute the "Exchange Offer"). Unless the context requires
otherwise, all references to "Borden Shares" shall be deemed to refer also to
the associated Rights. We are the holder of record of Borden Shares held by us
for your account. A tender of such Borden Shares can be made only by us as the
holder of record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Borden Shares held by us for your account.
The Merger Agreement (as defined in the Offering Circular/Prospectus)
provides that Borden will redeem the Rights at a redemption price of one and
two-thirds cents per Right immediately prior to consummation of the Exchange
Offer. Unless and until the Rights have been redeemed, if certificates
representing Rights (the "Rights Certificates") have been distributed to holders
of Borden Shares, such holders are required to tender Rights Certificate(s)
representing a number of Rights equal to the number of Borden Shares being
tendered in order to effect a valid tender of such Borden Shares. Until the
Distribution Date (as defined in the Offering Circular/Prospectus), the
surrender for transfer of any of the certificates representing Borden Shares
(the "Share Certificates") will also constitute the surrender for transfer of
the Rights associated with the Borden Shares represented by such Share
Certificates.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Borden Shares held by us for your account, pursuant to
the terms and subject to the conditions set forth in the Offering
Circular/Prospectus. Your instructions to tender Borden Shares held by us for
your account will also constitute a direction to us to tender a number of Rights
held by us for your account equal to the number of Borden Shares tendered. If,
in accordance with the Merger Agreement, the Rights are redeemed by the Board of
Directors of Borden prior to the consummation of the Exchange Offer, tendering
shareholders who are holders of record as of the applicable record date will be
entitled to receive and retain the redemption price of one and two-thirds cents
per Right in accordance with the Rights Agreement.
Your attention is directed to the following:
1. The "Exchange Ratio" means the quotient (rounded to the nearest
1/100,000) obtained by dividing (i) $14.25 by (ii) the average of the high
and low sales prices of the Holdings Common Stock as reported on the New
York Stock Exchange Composite Tape on each of the ten consecutive trading
days immediately preceding the second trading day prior to the date
contemplated for consummation of the Exchange Offer, provided that the
Exchange Ratio shall not be less than 1.78125 or greater than 2.375.
2. The Exchange Offer is made for all of the outstanding Borden Shares.
3. The Exchange Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on , , 1994, unless the
Exchange Offer is extended.
4. The Exchange Offer is conditioned upon, among other things, there
being validly tendered and not properly withdrawn prior to the expiration of
the Exchange Offer a number of Borden Shares which, when added to any Borden
Shares previously acquired by the Purchaser or Whitehall Associates, L.P.
(other than pursuant to the Option (as defined in the Offering
Circular/Prospectus)), represents more than 41% of the Borden Shares
outstanding on a fully diluted basis (other than dilution due to the
Rights). The Exchange Offer is also subject to other material terms and
conditions, which Borden shareholders should carefully consider. See "The
Exchange Offer--Certain Conditions of the Exchange Offer" and "Description
of Merger Agreement and Conditional Purchase/Option Agreement" in the
Offering Circular/Prospectus.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the exchange of Borden Shares pursuant
to the Exchange Offer.
The Exchange Offer is being made solely by the Offering Circular/Prospectus
and the related Letter of Transmittal and is being made to all holders of Borden
Shares. The Exchange Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Borden Shares in any jurisdiction in which the
making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require the Exchange Offer to be made by a
licensed broker or dealer, the Exchange Offer shall be deemed to be made on
behalf of the Purchaser by Morgan Stanley & Co. Incorporated or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
If you wish to have us tender any or all of the Borden Shares held by us for
your account, please instruct us by completing, executing and returning to us
the instruction form contained in this letter. If you authorize a tender of your
Borden Shares, all such Borden Shares will be tendered unless otherwise
specified in such instruction form. Your instructions should be forwarded to us
in ample time to permit us to submit a tender on your behalf prior to the
expiration of the Exchange Offer.
If Borden Shares are accepted for exchange and exchanged for by the
Purchaser pursuant to the Exchange Offer, Borden shareholders will receive,
subject to the conditions of the Exchange Offer, the number of shares of
Holdings Common Stock equal to the Exchange Ratio per Borden Share. See "The
Exchange Offer--Withdrawal Rights" in the Offering Circular/Prospectus for the
procedures for withdrawing Borden Shares tendered pursuant to the Exchange
Offer.
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INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER FOR
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
BORDEN, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offering
Circular/Prospectus dated November , 1994 (the "Offering Circular/Prospectus")
and the related Letter of Transmittal pursuant to an offer by Borden Acquisition
Corp., a New Jersey corporation, to exchange for all outstanding shares of
Common Stock, par value $.625 per share (the "Borden Shares"), of Borden, Inc.,
a New Jersey corporation ("Borden"), and (unless and until redeemed by Borden)
the associated Preferred Stock Purchase Rights (the "Rights").
This will instruct you to tender the number of Borden Shares and Rights
indicated below (or, if no number is indicated below, all Borden Shares and
Rights) which are held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in the Offering Circular/Prospectus and
in the related Letter of Transmittal furnished to the undersigned.
Number of Borden Shares (and Rights) to be
Tendered* SIGN HERE
.............................
...................... Borden Shares (and Rights) .............................
Signature(s)
Dated: ................................., 19 ..
.............................
Please print name(s)
.............................
Address
.............................
Area Code and Telephone Number
..............................
Tax Identification or Social
Security Number
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* Unless otherwise indicated, it will be assumed that all of your Borden Shares
(and Rights) held by us for your account are to be tendered.
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